Bridging Finance Calculator

If you need to buy a property faster than a standard mortgage allows, a bridging loan could be the solution. But how much could you borrow? Can you afford the higher interest rates and additional fees?

Our Bridging Finance Calculator helps you estimate key figures like loan-to-value (LTV), monthly repayments, and total interest costs. Use it to see if a bridging loan is viable for you and what repayments might be manageable over a typical term of 6 to 24 months.

What a calculator can’t factor in, however, is the reason for the loan, which often plays a role in lenders’ decisions – perhaps you’re buying a house at auction, a home considered unmortgageable or want to get an offer in before another bidder.

This is why it’s worth supplementing a quote with advice from a bridging finance broker. They can assess your specific situation and verify what a bridging loan for you is likely to be like.

How is a bridging loan calculated?

To calculate your bridging loan, a lender – and any bridging loan cost calculator – will factor in the net amount you’re asking to borrow, the property’s value, how long you’d like to borrow for, and the deposit you have.

The calculator also adds an interest rate and factors in extra fees, such as the lender’s valuation and legal fees, to give you a breakdown of the monthly repayments, the total interest you’d pay, and the final loan amount.

It’s important to note that some lenders use more complex calculators that take additional factors into consideration. Factors such as your income and exit strategy, credit history and debt, age, and property development knowledge (if you’re redeveloping a property) will play into a lender’s final decision.

How the interest rate is worked out

Bridging loans are likely to have interest rates a little higher than other mortgage products and be charged at a monthly rather than annual rate. That’s because they have a quicker turnaround time—typically under two weeks—and are designed as a short-term solution until longer-term financing comes in.

To narrow down the figure that will come with your loan, a lender will consider your credit rating as well as the viability of your exit strategy; are you planning to refinance onto a traditional mortgage, sell the property once it’s been redeveloped, or pay it off once another form of financing comes through?

How the extra costs and fees are worked out

Bridging finance is costly because of a range of fees associated with it, including interest. Most lenders charge a small percentage of the total loan as an arrangement fee. That percentage tends to be 2%, but it can vary depending on the bank or building society you opt to borrow from. If you borrow a larger amount, this may drop to 1%, and, in rarer cases, a lender may eliminate it altogether.

Then there are valuation fees. Any lender will require a valuation to be completed of the property the bridging loan is being taken out for. Prices for these vary depending on how much the property is worth, where it’s situated and whether or not a desktop or on-site valuation is needed.

The table below provides bridging loan examples that factor in a 2% lenders fee and a deposit around the 25% or 30% mark.

Other potential fees to account for include exit fees, solicitor fees and broker fees. The brokers we work with offer an initial consultation at no charge and will then lay out a pricing model beyond that.

Are bridging loans calculated any differently in Scotland?

No, bridging loans are usually calculated just the same in Scotland but your postcode may make it harder to find a bridging finance lender who will offer you a loan.

This is because more remote places such as the Highlands and Islands often have various postcode restrictions that affect the mortgage products you have access to. If you are looking at buying a property there, get in touch with a broker, as they’ll be able to share details of bridging loan availability in Scotland, draw up an estimate for you and recommend specialist Scottish lenders offering bridging finance.

While there are fewer lenders in Scotland, the number has grown in recent years, meaning more competitive rates.

How a bridging mortgage is calculated

Many people enter a bridging loan knowing that they plan to transition onto a residential mortgage as their exit strategy. This is known as a bridging mortgage and can be done with the same lender or a different one, depending on who is likely to offer the best long-term deal.

To determine what they’re willing to offer you as a residential mortgage, lenders typically use a bridging loan calculator to decipher the initial amount needed, followed by a standard mortgage calculator to determine how much of the debt from the bridging loan will be carried over onto the residential mortgage.

They’ll also employ the usual criteria to decide on your eligibility and how much they’re happy to offer as a mortgage. This includes looking at your income and spending, any debt, your credit history, age, and the property in question.

Get a bespoke quote from a bridging loan specialist

Bridging loan calculators indicate what you can afford to borrow and how much you’d be paying back over that short period. Supplement that with the knowledge of an experienced broker who can factor in all the nuances involved in bridging finance – what you need to qualify, your exit strategy and any possible renovation experience required – and you’ll have a detailed picture to base a decision on.

The experts we work with can then support you in the loan application, share the best bridging finance lender for you, negotiate terms, and assist in the later transition to a bridging mortgage if you choose to do so.

Use our bridging loan calculator for an initial idea and then give us a call on 0330 818 7026 or make an enquiry to be matched with a bridging finance specialist for a free initial chat.